Competition heats up as users flock to new services

Online private car rental services are taking shape in Europe, competing with each other as well as the traditional rental companies. Within two or three years, most likely one of the new services will come out on top, according to some insiders.

Private car rental or sharing services let people rent their private cars to others. Car owners can make some money on a car that might otherwise remain parked in front of their homes, and users have a relatively cheap alternative to commercial car rental companies in their neighborhood.

One of services making headway with this kind of car rental is France-based OuiCar, which started in 2007. Earlier this week, OuiCar announced it acquired one of its competitors, Unevoiturealouer.com, for an undisclosed sum, adding 3,000 cars to its existing fleet.

OuiCar has about 200,000 users and now offers 12,000 private cars for rent throughout France, making it the fifth largest car rental service in the country, according to the company. OuiCar offers more cars for rent than professional rental service Ada for instance, though other traditional services like Europecar and Avis still have a larger fleet, it said.

A typical small car can be rented for about a!30 (US$42) a day, including an all-risk insurance policy. OuiCar takes 30 percent of what the customer pays and 70 percent goes to the car owner, said company spokeswoman Marie Tanguygood.

Competing with the conventional car renters is exactly what OuiCar wants to do, Tanguy said, adding that the company has ambitions to become the largest car rental company in France. Eventually, OuiCar wants to offer a car for rent in virtually every street, she said. The company would also like to expand to other European countries.

To achieve that, it first has to face the competition within France.

The French online car share service Drivy, for instance, also has about 200,000 users while offering about 15,000 cars for rent, according to its site. Another French competitor, BuzzCar, has about 8,000 owners renting cars through the service.

French companies are not the only ones in the business. Across the border, in Germany, the competition is building. German services include Tamyca -- short for take my car -- which boasts about 4,500 cars, as well as Autonetzer, which has about 35,000 users and over 5,000 cars for rent, according to its site.

"Overall there are about 15 peer-to-peer car sharing companies in Europe," said Pascal Ontijd, co-founder of the Dutch online car rental service SnappCar. The company started about two and a half years ago and, like some rivals, wants to become the biggest car rental service in Europe, with a fleet of 250,000 private rental cars by 2018, he said.

SnappCar offers private car rentals in a way that's similar to its competitors. Prices vary from about a!15 a day to a!250 a day. But in contrast to OuiCar's business model, SnappCar does not take a percentage of the rental price, said Ontijd. SnappCar puts a flat a!10 fee per day on top of what the car owners charge (the fee is included in the price cited online). A part of that is used for an all risk-insurance and part of it is commission.

SnappCar's insurance was specially developed with insurer Centraal Beheer Achmea for the purpose of car sharing, Ontijd said. The most important part of that insurance is that it does not affect "no-claim" aspects of car-owner policies.

No-claim insurance provisions give discounts to car owners who do not report accidents for a certain period of time. The policy developed for SnappCar prevents accidents that happen when cars are rented from affecting no-claim provisions.

SnappCar has about 40,000 users, with 7,000 cars available for rent through the site. While most of the cars on the site are available for a fee, some people also use the service to safely loan their cars to friends.

Car owners can make their car available to friends for free on the site. They just pay the a!10 per day SnappCar service fee to cover insurance so owners and lenders don't need to worry if anything happens to the car, Ontijd said.

The company is already venturing across the border and launched in Germany last summer to test the waters, Ontijd said. A lack of time and resources meant the company's focus wasn't on other countries until now, but SnappCar plans to ramp things up by the end of the year, investing more effort in the German market while also launching in the U.K.

In order to do so, SnappCar needs about a!3 million, of which it already has about a!659,000 through crowd funding. SnappCar expects to raise the rest from investors by the end of the summer.

"We think there is room for about three P2P rental services in Europe," according to Ontijd, who estimated that it will take two to three years to determine which company will come out on top.

Loek is Amsterdam Correspondent and covers online privacy, intellectual property, open-source and online payment issues for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com